Eminent domains

The Chinese have just become the world’s leading consumers of red wine; China wants to import more wine of all kinds (from Chinese-owned vineyards elsewhere), produce more domestically and drink a whole lot more.

China has this year become the world’s biggest purchaser of Bordeaux wines. It consumes as yet just over a litre of wine per person annually, compared with 47 litres in France and 37 in Italy. so there’s plenty of room for growth, for foreign exporters and local producers. The area devoted to vineyards in China has doubled over the past 15 years to 600,000 hectares. while Europe is losing vineyards — it now has 3.5m hectares, 800,000 of them in France.

Although grapes have been grown in China for 2,000 years, volume winemaking only started in the 1980s. Until 1990, wine was produced solely in Hebei Province (around Beijing), Shandong Province and the Xinjiang Uyghur Autonomous Region, and was controlled by a few major state enterprises — Changyu, Dragon Seal, Great Wall and Suntime — which still dominate the sector. In the early 2000s, China developed highly successful joint ventures with foreign firms, and agreements were signed with multinationals including Miguel Torres, Domecq, Pernod Ricard and Castel. But while China has opened up its economy, it still holds that agricultural land is inalienable property, and access to it only possible through long-term leases contracted with the government or with local partners.

Joint ventures provided China with knowhow, funds and technology, while limiting imports. The French government invested €2m in establishing a vineyard in Hebei Province, a project later abandoned, although while it ran it formed partnerships, exchanged knowledge about types of wine, and trained the first Chinese wine specialists, such as Li Demei, who is now a leading consultant oenologist. French companies that invested had mixed results. Pernod Ricard withdrew from a complicated partnership, but has kept a presence in the Ningxia Hui Autonomous Region with its Helan Mountains domain. Castel still has a partnership in Shandong Province.

Since 2000, wine growing has been integrated into a government plan to develop western China, which has (...)